Brendan Shaw
“We are on the front lines.”
- St Vincent and Grenadine’s Prime Minister Ralph Gonsalves, July 2024.
“Part of the challenge to creating change in the pharmaceutical industry is that the current business model does not incentivise companies to invest in environmental sustainability.”
- Firth, I. et Al. 2023, “Moving towards a more environmentally sustainable pharmaceutical industry: recommendations for industry and the transition to green HTA”, Expert Review of Pharmacoeconomics & Outcomes Research, May 2023.
“It is still striking that the WHO Council on the Economics of Health for All does not include any members who are health economists. At risk of being provocative, I would argue this may in part reflect an increasing insularity of many health economists.”
- Hensher, M. “Climate change, health and sustainable healthcare: The role of health economics”, Health Economics, January 2023.
“It’s not easy being green.”
- Kermit the Frog, The Muppets.
When Hurricane Beryl smashed through the countries of the Caribbean earlier this month, it was a classic example of how environmental issues affect health systems.
In a subsequent press conference, the Prime Ministers of Grenada and St Vincent and Grenadine directly linked the impact of climate change to the early start to the hurricane season, and to its resulting impacts on medicine supplies, treatment of non-communicable diseases, and mental health issues.
Climate change is affecting human health and health systems all around the world. After thousands of years of enduring malaria, Europe largely eradicated the disease in the early 20th century, as had other high-income countries and regions. However, climate change is contributing to a return of malaria to Europe. Rising temperatures are encouraging the spread of mosquito-borne diseases in Europe, including malaria. In another example the spread of the aedes albopictus mosquito has recently been responsible for localised transmission of chikungunya virus in France and Italy, and dengue fever in Croatia and France.
Distribution of Aedes albopictus mosquito - known distribution, May 2024
Source: European Centre for Disease Prevention and Control, “Aedes albopictus - current known distribution: May 2024”, https://www.ecdc.europa.eu/en/publications-data/aedes-albopictus-current-known-distribution-may-2024, accessed 24/7/2024.
Dengue fever risks becoming more prevalent in Europe, cholera is making an ‘unwelcome return’ around the world, and other diseases like Mpox and Japanese encephalitis are becoming more prevalent – all due to climate change. It has also caused heatwaves causing greater heat-related deaths in India, drought reaching the top of the WHO’s emergency list, and malaria returning to Italy. All of this is brought on by climate change.
The World Health Organization says that “between 2030 and 2050, climate change is expected to cause approximately 250 000 additional deaths per year, from malnutrition, malaria, diarrhoea and heat stress alone. The direct damage costs to health is estimated to be between USD 2-4 billion per year by 2030.” It estimates that 13.7 million deaths each year, more than 24% of total deaths worldwide, are linked to environmental issues. For example, 4.2 million deaths each year are linked to air pollution alone.
Greening health systems
Environmental issues such as climate change are rapidly affecting health systems around the world and how those systems respond.
In recent years, there has been a push for countries to prepare their health systems for environmental challenges and resource appropriately to improve their environmental sustainability. Various environmental issues affect health systems and are challenging the traditional way such systems are managed. Health systems themselves contribute to climate change through carbon emissions from the energy they use, and the products and services they purchase and deliver. Other environmental issues in turn affect health systems, including pollution of the air leading to millions of deaths and the spread of diseases in many countries.
Source: Fleck, A. 2023. “Where Air Pollution Is Cutting Lives Short”, September, Statista, https://www.statista.com/chart/30841/average-life-expectancy-gains-if-air-pollution-rules-met/**, accessed 24/7/2024.
For example, life expectancy for people living in Bangladesh could be increased by 6.8 years per person if the country achieved WHO air quality targets. Pollution of water and soil systems with antibiotics and other antimicrobials resulting from overuse of such medicines, poor waste disposal from hospitals and sewerage systems, agriculture and aquaculture farming practices, and even poor waste management practices in the manufacture of such antimicrobials risks contributing to antimicrobial resistance. Meanwhile rubbish pollution from everything from disposable plastic products like syringes, saline bags, through to discarded foil strips used for medicines packaging, and the face masks that became ubiquitous during the Covid pandemic all contribute to a substantial amount of rubbish and pollution generated by health systems.
With the growing realisation that health systems themselves are part of the problem in environmental sustainability, efforts are being made to start to change things. Global momentum is building to better manage and deal with these issues. In 2019 the WHO listed air pollution and climate change as top 10 threats to global human health. In the same year, the WHO's World Health Assembly supported the introduction of the WHO global strategy on health, environment and climate change. The strategy aims to transform the way the world tackles environmental risks to health by accounting for health in all policies and scaling up disease prevention and health promotion.
Health systems around the world are starting to adopt more environmentally aware processes. For example, the UK’s National Health Service has adopted a ‘Green NHS’ to make the entire NHS environmentally sustainable, and in 2020 the NHS was the first health system in the world to adopt a net-zero carbon emissions target. In recent years, countries like Norway and Sweden have been piloting green procurement criteria for including environmental pollution criteria in the procurement of medicines like antibiotics.
But the transition will not be easy. Countries will need to adopt what’s called a ‘One Health’ approach which the WHO describes as recognising that the health of humans, domestic and wild animals, plants, and the wider environment (including ecosystems) are closely linked and interdependent.
Greening the private sector
The private sector has an important role to play here. A recent report for the World Economic Forum by LEK found that there are many opportunities for the private sector to contribute to building long term climate resilience in health systems.
Thankfully, pharmaceutical industry views on environmental issues are rapidly changing. When I started work in the pharmaceutical industry several decades ago, I remember staff at one company at the time proudly telling me how complicated the production process of their specialty medicine was. The way the medicine was manufactured required the vials of medicine to be flown from continent to continent in jet aircraft for each step of the production process. One step in production was done in one continent, then flown to another continent for the second stage of production, before being flown back to another continent for the third stage. Imagine the carbon footprint for each vial of that medicine. While maybe still necessary, today it’s hard to imagine such travel and carbon intensity in the production process being lauded as a good thing. At least today we think twice about it before doing it.
These days, the pharmaceutical industry is doing lots of good work improving the environmental sustainability of health systems. For example, the global pharmaceutical industry has had a long-running agenda on sustainability in healthcare on issues like minimising carbon emissions and reducing pollution through organisations like the European Federation of Pharmaceutical Industries and Associations (EFPIA), the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), and the AMR Industry Alliance.
Today, most major international pharmaceutical companies have their own extensive environmental sustainability programs. These company programs support the greening of their own activities and those of the broader health system, often as part of companies' broader ESG strategies. Various companies such as Astellas, GSK, Johnson & Johnson, Novo Nordisk, Shionogi and Pfizer, just to name a few, have extensive environmental programs driven in part by a recognition of the links between good environmental management and effective health systems.
Industries like the pharmaceutical industry are doing a lot already in this space, and with good reason. In the UK, for example, the NHS estimates that the manufacture, supply, and use of medicines accounts for 25% of the NHS’s total carbon footprint.
Greening economics- new paradigms needed in health economics and HTA
Kermit the Frog wasn’t a health economist, but his musings on the difficulties of being green give some guidance for health technology assessment experts and health economists on adapting to environmental sustainability. One of the challenges facing health systems in this transition to sustainability is how HTA evaluators and economists evaluate and fund goods and services for health systems.
Preferencing products, services and practices that limit carbon emissions, reduce pollution and better manage waste will require some value being placed on broader benefits to society and the environment. At a macro level, some governments have started placing greater emphasis on these broader benefits of government expenditure in their budgeting processes through well-being budgets and building broader concepts of societal well-being in their national accounts.
Adopting this approach in healthcare will require a broader concept of value in health technology assessment and health economics. This is something that hasn’t been done well to date and, in many cases, payers, technocrats and HTA experts have pushed back on demands for these sorts of approaches. Debates about accounting for the societal benefits and broader productivity pay-offs from health spending have been contested for decades. It has often been government practitioners in HTA themselves that have resisted this, on the grounds that there is, in their minds, insufficient certainty in the measurement of such benefits, or that such perspectives do not deal in real or tangible issues, or that accepting such benefits may result in higher health spending.
However, as with much of the economic debate about climate change, the fallacy here is to focus only on the costs of taking action and ignoring the costs of not taking action. While it is a given that every government and payer has a budget constraint to manage, over-emphasising the costs of spending and de-emphasising the long-term broader benefits of such spending risks permanently missing out on opportunities to improve health, the economy and society.
Be it a new cancer drug, a new vaccine for a disease, or a better diagnostic test to screen for disease, these can have broader societal benefits. Doing this is not easy, but it should not therefore be ignored because it is perceived as inconvenient or not fitting in with existing paradigms and frameworks.
Incorporating environmental sustainability factors into HTA evaluations and purchasing decisions is hard. Getting better at cross-sectoral collaboration between the public and private sectors is challenging. Looking outside the strict confines of the discipline of health economics for insights from political science, industry economics, behavioural and social sciences, finance and business adds a new layer of difficulty. These are all challenging. But they are necessary. Vital even.
Other methodological issues like discount rates will be a challenge for some HTA experts to confront. As Firth et al note: “Depending on the rate at which future costs and effects are discounted, society may prefer a more environmentally sustainable product to be prioritised over a cheaper one with a larger carbon footprint.” What discount rate an HTA system assumes in evaluations is likely to influence whether health systems can incorporate environmental factors into HTA decision making or not. Countries using high discount rates in HTA are likely to find incorporating environmental factors in decisions harder because the long-term benefits for society of doing so are excessively de-valued.
The risk here is that the increasing insularity of health economists may prove a barrier to health system reform. But health economists are going to have to get used to such challenges. Global trends are demanding it, whether HTA experts like it or not. Health economists are going to have to get their hands dirty embracing areas where historically they have not been comfortable. Other disciplines of economics have undergone these sorts of theoretical, methodological and epistemological challenges. It might be time for health economics to embrace more uncertainty.
Better incorporating sustainability and environmental value may prove a challenge for some, but it also provides an opportunity to deepen the discipline to evolve and incorporate emerging trends in broader economic disciplines.
It might not be easy, but going green is something health systems, health industries and health economics need to do. Fast.
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